Last March, the HR Strategy Blog published "Reorganize THIS," which became the subject of an edition of the popular  Cranky Middle Manager Show. Since then, we've received a lot of feedback, prompting some fine-tuning of the original column. The revised article, incorporating these changes, is as follows.


I got a call today from Nan, a former colleague trying to pitch some business with our firm.

“We’ve reorganized,” she explained.  “I'm not even an ‘HR Consultant’ anymore.  Now I'm in ‘Human Resource Business Process Outsourcing.’”

“But we don't need outsourcing,” I said. 

“That's okay,” Nan replied.  “I don't know a thing about the area anyway.”

All Too Common
I'm amazed at how often poorly managed companies reorganize. 

Take Nan.  She started in her company’s Communication practice.  After numerous re-orgs, they became, respectively, the Communication and Human Resources practice, followed by Organizational Comminication, Change Management, Human Resources, Human Resource Effectiveness, Organizational Effectiveness, Human Resource Management, and, now, the Human Resource Business Process Outsourcing practice.

Her group’s not getting any better — just harder to pronounce.

A Sure Sign
As Tolstoy once observed about families, each “unhappy” company is unhappy in its own way.  Healthy organizations, though, have lots in common.

For instance, they don’t usually need to reorganize. 

Shuffling organizational cards is merely feint of hand, dealing with symptoms, not problems. It’s intuitively counterproductive – like carrying signs saying “We Don't Know What We're Doing.”  

And when a company has to reorganize again, as bad ones typically do, the signs reappear, this time with “Kick Me – I'm Stupid” stamped on the back.

Who’s Zooming Whom?
Actually, as organizational leaders see it, they’re not the ones who are stupid.  

We are. 

Managers, and their consultants, think re-orgs camouflage flawed thinking and poor business decisions.  Indeed, they maintain, a re-org sends positive signals about the company's commitment to change — especially when it's driven by the newest, most jargon-loaded business models. 

Leaders restructure companies to convey the image of being flexible, responsive, and on the cutting-edge.   

But they really do it — because they’re clueless.

Insiders’ Jobs
 Take my friend Steve.  His company went through a re-org that solicited lots of feedback from employees.  Not a bad start, you'd think.  But the group put in charge of interpreting the input, and using it to restructure the organization, was made up solely of senior managers — who were hand-picked by other senior managers. 

The task force was therefore, as Steve put it, made up of “the very people whose decisions had gotten us into this mess.”

In the end, after waves of restructuring and layoffs, guess which managers were the only ones who kept their roles intact? 

The members of the task force.

So . . . that’s six months of shuffling — only to end up with the same organizational hand.

The Sad Truth
I suppose this sort of thinking should be expected.  After all, in the corporate world, honest assessment can be as rare as Ivy League teams in the NCAA's Final Four. 

And that's not necessarily bad.  If management owned up to mistakes, in business direction and strategy, people might question how the company was run.  Employee morale could deterorate.  Worst of all, both sales and equity could take a hit. 

That’s why it’s so much more . . . practical to blame things on infrastructure.

It suggests that the only real problem is execution.  And, compared to strategy, infrastructure's easy to fix.  It's a simple matter of changing departmental designations, reporting relationships, and arrangement of the company‘s “deck chairs.” 

The unfortunate truth, though, is this:  All that re-orgs do is remix the same ingredients. 

They don’t change the formula. 

Poor managers, for instance, don't become aces when given different titles and a new department name.  And, though layoffs do reduce expenses, there’s never been one yet that’s expanded market share, improved quality or customer service, or boosted top-line revenue. 

It’s really just a matter of common sense.  If the strategy’s off-track, how can internal realignment possibly be the right fix?  It would merely make the company more efficient – at doing the wrong things.

A Misdirection Play
Re-org is simply a way to create the impression that management's on top of things.  In reality, though, the new arrangements only incubate more dysfunction.  The issues that drove the perceived need to restructure will ultimately only resurface — but with greater intensity, and to much worse effect.

Still — and this is perhaps the key point — all of these things will happen later. 

By then, the brain trust hopes, someone else will be in line to take the fall.

It's Strategy, Not Organization

Reorganization is never a substitute for restrategizing.  Despite what internally focused managers think, customers don’t give a whit about your company’s job titles or who reports to whom.  What they do care about is whether you are attuned to their needs, driven by their satisfaction, and both motivated and empowered to serve their interests.

Let's face it: If the only thing between you and successfully achieving your organization’s strategy is reorganization — then you can be sure you have the wrong strategy.

That's why, if someone at my company ever wanted to reorganize, I'd take a hard look at our business strategy instead. 

I'd also seek some outside expertise — perhaps even get Nan, my Human Resource Business Process Outsourcing Consultant.

Of course, by that time, she'll probably be called something else.


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For more on the pressures that reorganization can create, see "Some 'Wicked' Thoughts on Managing Change"

The following comments were submitted regarding a previous version of this column.